Downsizing? Are You Sure?

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Gray Easterling
Gray Easterling

According to an article in the December 10, 2012 edition of the Wall Street Journal, downsizing is a popular topic. Small 401(k) balances for 50 year olds, more mortgage debt by 55-64 year old homeowners and concerns about having enough money for retirement result in poll numbers suggesting that 43% of Americans ages 50-64 plan to move, and 50% of those moving say they will move to a smaller house. I know that Beverly and I have had the same discussion many times without any concrete resolution as of today. Moving to a smaller home is designed to solve a lot of problems in retirement, but it doesn’t always work out as planned. One obstacle is selling your home in a somewhat fragile market. Buying a new home before selling the old one can result in some unpleasant consequences. The obvious solution is to sell one house before buying another one, even if it means moving twice; even if it means living with the kids for a few months. What if you do everything right, buy the new house and several months later find out that your new home and neighbors are not exactly what you had hoped for? If you put the new house back on the market, you may lose money on the rebound.  Another problem is dealing with the emotional baggage of leaving your old home. Clearing out old possessions can be overwhelming. Speaking from experience, when we had to clear out our attic to have foam insulation sprayed in, it was eye-opening how much of our kid’s memories we had stored in boxes. Trying to get the kids to take possession of these “heirlooms” has not met with much success. Thinking about leaving the home where so many memories were made is also challenging. Also, if you do downsize, are you going to rent a storage building for all the extra stuff that won’t fit in the new, smaller home? If so, you need to budget $1,000-$1,500 a year for that expense.

 

Anticipating big savings? Most downsizers settle into a new home within 20 miles of the previous residence. Generally, this means no major savings from utilities, groceries and other essentials. With inflationary building prices, the profit from selling the old house after the purchase of a smaller new home may not be as much as expected.  Changing lifestyles to a less expensive model generally is not part of the plan. Even when the toys are sold when the old house is sold, new ones are added soon after settling into new surroundings. As one of the subjects of the article states, “You have to keep moving. You can’t just sit around the house.”Assuming you overcome the above stated hurdles and make the move to smaller spaces, here are some suggestions. Take with you only the essentials needed to furnish the new house. Sell or give the rest away, but don’t count on your kids taking anything. Arrange your home so that each person has some personal space. Expect the unexpected. It is not unusual these days for adult children to return to the nest, or elderly parents to move in. Should you take a vote? I don’t know. I do know that none of my children think I should downsize. They like the idea of having a place to stay where everyone can get together under the same roof. Of course, they don’t have to maintain the yard or pay the utilities. The decision is much easier for them than for us.

 

I have a suggestion for your New Year’s resolution. Do you have 5 to 10 friends that you can share pieces of your personal and prayer life? If so, I have a story for you. Over 25 years ago, Beverly and I began a spiritual journey with five other friends. What began as an experiment has become a very essential and vital part of our life. Every six weeks or so, we meet, visit, share a meal and, most importantly, share and bare our inner souls to each other. We hold each other accountable for our prayer lives, our study, our actions with others, church attendance and close moments to our Lord and Savior. If one of us is not able to meet, none of us meet. We have shared births, deaths, weddings, graduations, personal successes and failures; in short, life. This is a special bond that we cherish and protect. We know that no matter what has happened in our lives, we can wrap our arms around our companions and share the experience with them. Whether it be good news or bad, it matters not. We will celebrate the good and pray together about the bad. My prayer for each and every one of you is that you find a group with whom you can share your life without pretense or worry. It was not and is not always an easy commitment. It is worth every bit of the effort. Before God, “all hearts are open, all desires known and no secrets are hid.” From Noel Julnes-Dehner, “by your Spirit, inspire our senses that we may see as you do and hear as you speak. And, as we sleep, come into our dreams that our souls may awaken to you.”

 

Securities, insurance and investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment advisor 3416 North Blvd, Alexandria, LA 71301, (318) 448-3201.  The views expressed are not necessarily the opinion of FSC Securities Corporation.